Bernanke: King and I
Some have been asking for quite a while now what Ben Bernanke will be up to when he finally gets to close his office door at the Federal Reserve for the last time? Will he be sunning it on some Cayman Island beach? Will he be cut into little pieces in the tapering tantrum that follows the withdrawal of $85 billion a month in Treasury Bonds that are going to disappear down the rabbit hole? Will the angry mob of swarming crowds be seeking out his hide-out to make the man pay for his mistakes?
Well, Ben there are two things that should be taken into account. First off: artists are rarely recognized in their lifetime, are they? Some will certainly agree that Ben Bernanke is an artiste of some sort, with an ‘e’ at the end; a skilled public performer, an entertainer, a person with artistic pretentions. He has certainly topped the bill in the past few years, that’s for sure. Maybe in a hundred years we will look back and have a Bernanke piece of work hanging from some plate rack in the living room. That’s if the plate rack and the living room are still in existence after the Quantitative Easing has had enough of us all.
The second thing that needs to be taken into consideration is that Bernanke should have seriously considered applying for the job before Mark Carney (former Governor of the Bank of Canada) got in when Mervyn King steps down as Bank- of-England Governor in just a few days, on June 30th. Why? Well, in Britain, they give life-peerages of privilege to those that are criticized with having done little all else in the UK except heighten the already sorrowful plight of the state of the economy there after the financial crisis.
Gordon Brown, the then-Chancellor of the Exchequer and later Prime Minister once quipped that there were two types of Chancellor in the UK: first, the one that failed, and then the one that got out in time. Brown got out and became Prime Minister and some will add managing to combine the first and the second, failing and getting out in time in one foul swoop. Machiavellian. Shakespearean. Macbethian tragedy on stage: “Life's but a walking shadow, a poor player/ That struts and frets his hour upon the stage / And then is heard no more”. If only! King and Bernanke have had their absurd hour on stage at the Bank of England and at the Federal Reserve, but in Britain life peerage is the reward. What will Bernanke be getting? An Oscar?
When Macbeth heard that his wife, Lady Macbeth was dead he replied “she would have died at sometime, either now or later". Perhaps King will say the same thing about the Old Lady of Threadneedle Street while he’s quietly sat on his chesterfield-padded red seat at the House of Lords. Bernanke might be saying the self-same thing about the Federal Reserve.
George Osborne, the Chancellor of the Exchequer of the UK (not to be confused with the R&B singer, Jeffrey Osborne, making the mistake that Barack Obama made at the G8 summit – which incidentally says more about the fact the Mr. Osborne is non-existent than Obama’s liking for music) said at the Mansion-House speech to the City that Mervyn King had "helped to lead our country through an extraordinary period of its economic history". No comment.
Some might say that these were and still are economically-troubled times. Others will say that Mervyn King failed to see the crisis coming and failed to deal with it adequately. Some say that King was Greenspan’s double when he slashed interest rates, leading to the credit bubble. Some said that he was a brilliant economist, but his stint at the Bank of England was far from shining. In a report that was published yesterday by a banking commission headed by Andrew Tyrie, Conservative MP in the UK, it was suggested that bankers, even top bankers should get prison sentences and should not be paid their bonuses until up to ten years after they had earned them in the hope that it would inject some morals into the banking sector in the world. Obviously, the report probably forget when submitting it to George Osborne to mention the fact that central bankers were of course not exempt. Or are they? King has always been strongly criticized for failure to act immediately, when it took five months to cut interest rates from 5% to 0.5%. He also never managed to keep inflation at around 2%. Although at least he did admit that the banks had put “profits before people”.
Mervyn King’s reply to George Osborne’s accolade was: "I am truly honoured to have the opportunity to continue my public service in the Lords. Chancellor, I know you will be comforted and relieved that I consider the role of members of the House of Lords to be, as Keynes put it, ruthless truth-telling."
So, watch out guys, Mervyn King has given the kiss (of death) and will now tell all. Truth-telling is a nasty business. There must be quite a few that are running for the hills to hide. But, one thing that King knows, now: people love being told the truth, but only after it has happened. It makes them feel good, with that ‘I-told-you-so’ attitude and secondly, it gives them what they want: someone else to put the blame on.
So, if Ben Bernanke is looking for something to do in January 2014, someone tell him that there is probably a seat somewhere in the House of Lords in the UK, right next to Mervyn and that he has to get down to writing his memoires. People love a good tragedy! If you can't give them tragedy, give them comedy, please!
Originally Posted: Bernanke: King and I
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